Apple Supplier

Responsibility
2011 Progress Report
 Supplier Responsibility 2
2011 Progress Report

Contents

Page 3 Apple and Supplier Responsibility

Driving Change
2010 Program Highlights

Page 5 Empowering Workers

Expanding Training to Additional Facilities
Enhancing Training Quality
Supplier Employee Education and Development (SEED)

Page 7 Protecting Foreign Contract Workers

Limiting Recruitment Fees
Focusing Audits on High-Risk Facilities
2010 Findings and Corrective Actions
Training in Best Practices and Government Programs

Page 9 Preventing Underage Labor

2010 Findings and Corrective Actions
Returning Underage Workers to School
Improving Management Systems Across Facilities

Page 11 Requiring Conict-Free Sourcing of Extractives

Mapping Apple’s Supply Base
Validating Conict-Free Smelters

Page 13 Monitoring Compliance

Audit Program
Overview of 2010 Audit Results
2010 Core Violations

Page 18 Responding to Suicides at Foxconn

Page 20 Addressing the Use of N-Hexane

Page 21 Holding Suppliers Accountable

Page 22 Moving Forward

Page 23 Appendix
 Supplier Responsibility 3
2011 Progress Report

Apple and Supplier

Responsibility

Driving Change
Apple is committed to driving the highest standards of social responsibility
throughout our supply base. We require that our suppliers provide safe working
conditions, treat workers with dignity and respect, and use environmentally
responsible manufacturing processes wherever Apple products are made.
Suppliers commit to the Apple Supplier Code of Conduct as a condition of
doing business with us. Drawing on internationally recognized standards, our
Code outlines expectations covering labor and human rights, health and safety,
the environment, ethics, and management commitment. Apple monitors
compliance with the Code through a rigorous program of onsite factory
audits, followed by corrective action plans and verication measures.
Apple’s approach to supplier responsibility extends beyond our audit program.
We empower workers through training, educate factory management, address
underlying issues with nongovernmental organizations (NGOs) and industry
groups, and hold suppliers accountable for their practices. By making social
responsibility fundamental to the way we do business, we ensure our suppliers
take Apple’s Code as seriously as we do.

Apple Supplier Code of Conduct

Labor and Human Rights
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Health and Safety
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!" G(+<*@"+)-"/+4(*="
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Environmental Impact
!" G+H+.-$&/"/&5/*+)%("
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!" 2+/*(?+*(."'+)+1('()*
!" 9,."(',//,$)/"'+)+1('()*
!" I$<,-"?+/*("'+)+1('()*
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Ethics
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!" #,/%<$/&.("$4",)4$.'+*,$)
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" +)-"+)$)='$&/"%$'6<+,)*/
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Management Commitment
!" 7$'6+)="/*+*('()* !" #$%&'()*+*,$)"+)-".(%$.-/ !" 2$.3(."4((-5+%3"+)-"6+.*,%,6+*,$)
!" A+)+1('()*"+%%$&)*+5,<,*="+)-".(/6$)/,5,<,*= !" 0.+,),)1"+)-"%$''&),%+*,$) !" 7$..(%*,8("+%*,$)"6.$%(//
 Supplier Responsibility 4
2011 Progress Report

2010 Program Highlights

Apple continues to drive improvements that make a di!erence. In 2010,
Over the past several years, Apple has
audited 288 facilities for compliance our supplier responsibility program included the following key activities:
with our Code.
• We extended our compliance monitoring program deeper into our
2007 2008 2009 2010 supply base. In 2010, we completed rst-time audits of 97 facilities and
First-time audits 39 69 83 97 comprehensive repeat audits of 30 facilities, for a total of 288 supplier
facilities audited since 2007.
Repeat audits - 14 19 30
• We expanded our training initiative beyond our nal assembly manufacturers
Total facilities 39 83 102 127
so that more workers in our supply base understand their rights and protec-
audited
tions under local law and Apple’s Code. Since launching in 2008, Apple’s
programs have trained more than 300,000 workers.
• We dedicated additional resources to protecting the rights of workers
who move from their home country to work in factories in another country.
Many of these immigrants are charged exorbitant fees that drive them into
debt, an industrywide problem that Apple discovered in 2008 and that
we classify as involuntary labor. In 2010, we continued our search for these
violations, auditing all of our production suppliers in Taiwan and many in
Malaysia and Singapore. As a result of Apple’s audits and rigorous standards,
foreign workers have been reimbursed $3.4 million in recruitment fee
overcharges since 2008. We also trained suppliers on how to improve
their recruiting practices, as well as on their legal and ethical obligations
to foreign workers.
Apple Supplier Code of Conduct • We worked aggressively to prevent the hiring of underage workers. We
While similar to the Electronics Industry equipped facilities with stronger age-verication tools, educated them
Citizenship Coalition (EICC) Code of on managing third-party recruiters, and held them accountable for the
Conduct, Apple’s Code is more stringent recruiting practices of a"liated schools and labor agencies. In addition,
in several important areas, for example,
we are leading the industry by requiring suppliers to return underage
requiring collective bargaining practices
workers to school and to nance their education.
and prohibiting any form of involuntary
labor. To download our Code, visit • We mapped the use of potential conict minerals in our supply chain. We
www.apple.com/supplierresponsibility. identied 142 Apple suppliers that use tantalum, tin, tungsten, or gold to
manufacture components for Apple products and the 109 smelters they
source from. Apple is also at the forefront of a joint e!ort with the EICC
and the Global e-Sustainability Initiative (GeSI) that will help our suppliers
source conict-free materials.
This report provides details about how we work with suppliers to protect
worker rights and improve factory conditions. Also included are a summary
of our 2010 audit results and descriptions of core violations, frequent ndings,
and the corrective actions that Apple has required.

Training requirements
Apple-mandated social responsibility
training must cover the following topics:
• Apple’s Code and the EICC’s Code
of Conduct
• Occupational health and safety
• Work-related injury and disease
prevention
• Workers’ rights related to antiharass-
ment, antidiscrimination, and grievance
processes
• Local labor laws
• E!ective management practices
(for line supervisors and managers)
Supplier Responsibility 5
2011 Progress Report
Empowering Workers
Expanding Training to Additional Facilities
In 2009, Apple focused on e!orts to raise awareness and empower workers
through social responsibility training at our nal assembly manufacturers.
All workers, supervisors, and managers who worked on Apple products at
these facilities were trained on worker rights under our Code.
In 2010, we extended the reach of this initiative, enabling 29 additional
facilities—selected based on their lower audit scores—to deliver social
responsibility training. In the past two years, more than 300,000 workers
have been trained on occupational health and safety, work-related injury
and disease prevention, worker rights, and local labor laws; and more
than 6000 supervisors and managers have also been trained on their
responsibilities to protect workers.
Social responsibility training is incorporated into new-hire orientation sessions.

Impact of social responsibility
training
A survey of assembly line workers
showed increased condence in
their rights since the launch of social
responsibility training. For example,
in 2009 only 59 percent of surveyed
workers indicated that they would
send feedback without any concern,
while in 2010 the number rose sharply
to 93 percent.
Supplier Responsibility 6
2011 Progress Report
Enhancing Training Quality
In 2010, we worked with Verité and the Fair Labor Association—two interna-
tionally recognized NGOs in human rights—to evaluate the quality of social
responsibility training at our nal assembly manufacturers. Impact assessments
showed that Apple-mandated training had increased knowledge and awareness
of worker rights under Apple’s Code and local law.
At the same time, we gained insight into areas for improvement, including:
reducing class size, increasing interactivity, and enhancing coverage of
antiharassment, antidiscrimination, and grievance mechanisms. We have
integrated these recommendations into our supplier training programs.
Supplier Employee Education and Development (SEED)
More than 16,000 workers enrolled in Apple’s SEED initiative in 2010. This
computer-based learning program o!ers classes in English language and
in computer and technical skills. In addition, some workers are able to join
onsite associate degree programs linked to Chinese universities.
Candidates for the associate degree program take their qualifying examinations.

“On behalf of all the foreign workers
here, I wish to convey our sincere thanks
for the e!orts and assistance you have
given to us by asserting our rights as
foreign workers.”
— Assembly line worker at a circuit board
factory in Taiwan
Supplier Responsibility 7
2011 Progress Report
Protecting Foreign
Contract Workers
Following a 2008 audit discovery that involved immigrant workers, Apple took
independent action to address unethical hiring practices. We had learned
of a complex recruitment process in which some foreign contract workers
were paying fees in excess of applicable legal limits. Since then, Apple has
enforced a groundbreaking standard for recruiting foreign workers, resulting
in reimbursements of more than $3.4 million in overcharges—thousands of
dollars per worker in some cases. To prevent future abuses, we engaged with
government agencies, NGOs, and peer companies in Southeast Asia to educate
our suppliers on how to improve their recruiting practices, as well as on their
legal and ethical obligations to foreign workers.
Limiting Recruitment Fees
Some of our suppliers work with third-party labor agencies to hire contract
workers from countries such as the Philippines, Thailand, Indonesia, and
Vietnam. These agencies, in turn, may work through multiple subagencies
in the hiring country, the workers’ home country, and, in some cases, all the
way back to the workers’ home village. By the time the worker has paid all
fees across these agencies, the total cost can equal many months’ wages,
forcing workers into debt to gain employment.
Apple views recruitment fee overcharges as debt-bonded labor, or involuntary
labor, which is strictly prohibited by our Code. We limit recruitment fees to
the equivalent of one month’s net wages and require suppliers to reimburse
overpaid fees for all foreign contract workers in their facilities, including
workers not assigned to Apple projects. To the best of our knowledge, Apple
is the only company in the electronics industry that mandates reimbursement
of excessive recruitment fees.
Focusing Audits on High-Risk Facilities
In 2010, Apple dedicated additional resources to auditing suppliers in countries
known to be destinations for migrant workers. We conducted full audits at 20
facilities in Taiwan—accounting for 100 percent of our Taiwanese production
suppliers—and eight facilities in Malaysia and Singapore. Each audit involved
a special team of individuals who speak the workers’ languages and understand
the laws of the workers’ home countries.
 Supplier Responsibility 8
2011 Progress Report

“Apple is putting its signicant Apple audits are supported by our stringent standard for Prevention
business clout behind an initiative that of Involuntary Labor, which species contract requirements, grievance
is changing relationships between processes, agency management, the handling of workers’ passports,
labor brokers and suppliers. We hope
and other management practices. In addition, we hold our suppliers
that more companies will adopt the
responsible for the recruitment practices of their labor agencies and
approaches that Apple has taken.”
the entire recruitment process.
— Dan Viederman, Executive Director,
Verité

“Apple has shown genuine commitment

to addressing complex foreign/migrant
worker issues such as debt bondage
and unethical recruitment. They have
taken positive steps by placing limits
on the recruitment fees payable by
foreign contract workers and requiring
reimbursement of recruitment fee over-
charges. Challenges remain, but these
steps help dene the responsible role
business can play in protecting the
rights of migrant workers.”
— Aron Cramer, President and CEO,
Business for Social Responsibility (BSR)
Foreign contract workers often perform highly skilled tasks at Taiwanese factories.

2010 Findings and Corrective Actions

Our expanded auditing e!orts in at-risk countries revealed 18 facilities where
foreign workers had paid excessive fees to recruitment agencies. In each case,
Apple conducted a detailed investigation of the recruitment process and the
fees paid by workers. We required each supplier to reimburse any fees that
exceeded Apple’s limits.

Training in Best Practices and Government Programs

Building on the success of our 2009 workshop, we required management
from all our Taiwanese suppliers to attend a two-day interactive workshop
that covered our Prevention of Involuntary Labor standard, as well as best
practices for labor agency monitoring, direct hire processes, and onsite
management of foreign workers.
We also invited government o"cials from Taiwan, Thailand, and the Philippines
to share information on their laws and programs regarding recruitment and
management of foreign workers, including direct hire processes that greatly
reduce the fees charged to foreign workers by providing government
assistance in place of labor agencies.
We will incorporate feedback on this curriculum and expand training to
suppliers in Malaysia and Singapore in 2011.

Underage Workers
60 Active Cases
31 Historical Cases
Apple’s 2010 audits revealed 91 cases of
underage labor, including 31 workers who
had been hired prior to reaching the legal
age, but were no longer underage or no
longer employed at the time of our audit.
Recruitment Source
89 via School or
Labor Agency
2 via
Factory
Most of the underage workers discovered in
our 2010 audits had been recruited through
schools or labor agencies.
“Apple has been aggressive in their
e!orts to root out cases of child labor
in their supplier factories. Where issues
arise, Apple digs deep to understand
the causes and helps the young people
return to their families and get back
into school.”
— Rosey Hurst, Director, Impactt Ltd
Supplier Responsibility 9
2011 Progress Report
Preventing Underage Labor
Apple does not tolerate any instance of underage labor. Whether we discover
active workers or historical cases (workers had either left or had reached legal
working age by the time of the audit), we classify these as core violations.
Apple demands immediate corrective actions, including returning the under-
age workers to school, nancing their education, and improving management
practices to prevent future occurrences.
2010 Findings and Corrective Actions
In recent years, Chinese factories have increasingly turned to labor agencies
and vocational schools to meet their workforce demands. We learned that
some of these recruitment sources may provide false IDs that misrepresent
young people’s ages, posing challenges for factory management.
To address this di"cult scenario, we intensied our search for underage labor
in 2010, interviewing more workers and further scrutinizing recruiting practices,
employment records, and worker IDs, especially where third-party labor
agencies and schools were involved. Our audits of 127 facilities revealed ten
Chinese factories that had hired workers under the age of 16 years, the
minimum age for employment in China.
Across nine of these facilities, a total of 49 workers were hired before
reaching the legal age. Working with experts in the eld, Apple conducted
a complete analysis of the hiring systems at each factory. We found that
all facilities had unsophisticated systems for age verication and ID checks.
Apple has required the facilities to institute policies and procedures that
will prevent employment of underage workers—and to enforce them with
third-party recruiters. To ensure e!ective implementation, we required
managers to attend training and to follow up with one-on-one consulting.
All facilities have cooperated fully with these measures.
Of the ten facilities with underage labor violations, we found one that had
hired a much larger number of underage workers—a total of 42. In addition,
we determined that management had chosen to overlook the issue and was
not committed to addressing the problem. Based on the poor likelihood of
improvement, we terminated business with the facility. During our investiga-
tion, we also discovered that the vocational school involved in hiring the
underage workers had falsied student IDs and threatened retaliation against
students who revealed their ages during our audits. We reported the school
to appropriate authorities in the Chinese government.

Juvenile worker protections
Apple also monitors the treatment
of workers who meet the applicable
legal minimum age for employment
but are younger than 18 years of age,
classied as juveniles. Our Juvenile
Worker Protections standard requires
factories to adhere to student labor
laws and to verify actions on the part
of schools—particularly important as
factories increasingly turn to schools
for student interns.
HR managers and production managers
brainstorm corrective actions and
preventive actions.
Supplier Responsibility 10
2011 Progress Report
Returning Underage Workers to School
Apple has been aggressive in helping underage workers return to their
families and get back to school. For both active and historical cases, our
industry-leading standard requires suppliers to pay educational expenses,
living stipends, and lost wages for six months or until the worker reaches
the age of 16, whichever is longer.
Apple also ensures that these students have the support they need to
succeed in school. For all active and historical underage workers, we provide
individual assistance, including contacting the family, identifying educational
options, enrolling the young person in school, and following up on their
progress. If underage workers have already left the factory, we make every
attempt to locate them and o!er the same support for their education.
Improving Management Systems Across Facilities
Apple’s Code has always clearly prohibited underage labor. In 2010, we
issued a new standard on Prevention of Underage Labor to specify methods
for preventing employment of underage workers and to clarify management’s
responsibility. Our suppliers must maintain robust documentation and age-
verication procedures, personnel records, and systems for communicating
labor policies across the facility and with third-party recruiters. The standard
also holds our suppliers accountable for the practices of all employment
agencies and school programs that provide workers to their factories.
To prevent the future hiring of underage workers, Apple launched a training
initiative in November 2010. Our rst interactive workshop trained HR managers
from 25 Chinese facilities on our new standard and provided an opportunity
for suppliers to share challenges and best practices. Topics included China
labor law, relationships with schools and labor brokers, record-keeping
systems, protection of juvenile workers, and remediation of underage labor
cases. As follow-up to the training, we are working individually with suppliers
to implement improvements to their HR management systems.

What is a “conict mineral”?
The mining of columbite-tantalite,
cassiterite, wolframite, and gold—
which are rened into tantalum (Ta),
tin (Sn), tungsten (W), and gold (Au),
respectively—is believed to fuel
political strife in the Democratic
Republic of Congo (DRC ) and
neighboring regions. The metals
derived from these “conict minerals”
are used in small quantities in
electronics components found in
automotive, household, communica-
tions, and computing devices, as well
as in non-electronics industries.
Supplier Responsibility 11
2011 Progress Report
Requiring Conict-Free
Sourcing of Extractives
Apple’s commitment to social responsibility extends to the source of raw
materials used in the manufacturing of our products. We require our suppliers
to use only metals that have been procured through a conict-free process and
from sources that adhere to our standards of human rights and environmental
protection. The supply chains for “conict minerals” consist of many types
of businesses—family-run mines, brokers, smelters, reners, and commodity
exchanges—before reaching a component or subcomponent manufacturer.
The combination of a lengthy supply chain and a rening process makes it
di"cult to track and trace these materials.
Apple is taking multiple steps to tackle this challenge. We started by mapping
our supply chain to the smelter level, so that we know which suppliers are
using tantalum, tin, tungsten, or gold and where they are getting the metal.
Next, we are working at the forefront of a joint e!ort with the EICC and the
Global e-Sustainability Initiative (GeSI) to audit smelters of these ores and
to validate conict-free sources. Audits of tantalum smelters began in 2010.
Upon completion, we will require suppliers to source only from smelters that
comply with EICC and Apple standards.
Mapping Apple’s Supply Base
In 2010, Apple completed a detailed investigation into the use of extractives
at all levels of our supply base. The results include both component and
subcomponent suppliers that use tantalum, tin, tungsten, or gold in the
manufacturing of Apple products, as well as the smelters that originally
processed the ore.
Tantalum Tin Tungsten Gold
Suppliers using metal in components 23 125 23 116
of Apple products*
Smelters used by these Apple suppliers 12 43 13 41
* Many of our suppliers use more than one metal.

New SEC requirements
Apple is working to ensure full compli-
ance with provisions of the Dodd-Frank
Consumer Protection and Wall Street
Reform Act, which became U.S. law
in July 2010. Under Dodd-Frank, the
Securities and Exchange Commission
(SEC) is required to publish regulations
in April 2011 to establish 10K reporting
requirements for companies on the use
of conict minerals. As Apple continues
to improve information about our sup-
ply base, we have engaged—along with
others in the electronics industry—with
the SEC and the U.S. State Department
as they develop these regulations.
Supplier Responsibility 12
2011 Progress Report
Validating Conict-Free Smelters
Apple is applying pressure on our suppliers and through industry groups
to establish methods to identify the origin of ores in our supply base. As
an active participant in the Extractives Workgroup, a joint e!ort of the EICC
and GeSI, we have launched a process to validate smelters that comply with
our standards.
Apple serves in many capacities on the Extractives Workgroup. We participate
on subteams that develop protocols for auditing smelters and tools for
gathering data throughout the supply chain. We are also one of several
companies on the Executive Audit Review Committee, responsible for
reviewing audit results.
In 2010, the Extractives Workgroup began audits to identify smelters that can
demonstrate, through an independent third-party process, that they do not
procure materials from sources associated with conict in the Democratic
Republic of Congo (DRC) or adjoining countries.
Smelter audits include a thorough review of business systems and documen-
tation of raw materials purchases. A smelter is identied as noncompliant if
a conict material is present, if the smelter has insu"cient documentation to
support validation, or if the smelter refuses to participate in the audit.
EICC audits of electronics-grade tantalum smelters are under way, and we
expect audits of all tantalum and tin smelters to be completed by the end
of 2011. See www.eicc.info/extractives.htm for more information.
As the EICC/GeSI Extractives Workgroup completes smelter audits, Apple
will require our suppliers to source only from approved conict-free smelters,
and we will incorporate source validation into our regular audits.
 Supplier Responsibility 13
2011 Progress Report

Monitoring Compliance

Apple’s supply base
• Final assembly manufacturers assemble
the Mac, iPad, iPod, and iPhone.
• Component suppliers manufacture
parts and components, such as LCDs,
hard drives, and printed circuit boards
from which nished Apple products are
assembled. Component suppliers also
manufacture Apple peripheral products,
such as Time Capsule, the LED Cinema
Display, and keyboards.
• Nonproduction suppliers, such as o"ce
supply vendors and call centers, provide
products and services that are not part
of the Apple manufacturing process.
Audit Program
Apple continues to execute a rigorous monitoring program to ensure our
products are produced under socially and environmentally responsible
conditions. Of the suppliers Apple audited in 2010, more than 40 percent
stated that Apple was the rst company ever to have audited their facility
for social responsibility compliance.
Audit site selections
Each year, we audit more factories across our supply base. Apple audits all
nal assembly manufacturers every year. We select other suppliers based on
risk factors—such as conditions in the country where a facility is located and
the facility’s past audit performance—enabling us to focus our e!orts where
we can have the greatest impact. As of December 2010, Apple has audited
288 facilities located in China, the Czech Republic, Malaysia, the Philippines,
Singapore, South Korea, Taiwan, Thailand, and the United States.

Audited Facilities
First-Time Audits Repeat Audits
127
102
30
83 19 97
14 83
69
39
39

2007 2008 2009 2010

* Reported last year as 190.

Audit process
An Apple supplier responsibility auditor leads every audit, supported by
local third-party auditors trained to use our detailed audit protocol and to
assess the requirements specied in our Code.
 Supplier Responsibility 14
2011 Progress Report

Protection against retaliation Apple audits cross-reference data from multiple sources. We conduct
When workers are interviewed during interviews with employees, contract workers, and senior management
an audit, they receive a hotline card in relevant functional areas. We also conduct a physical inspection of
with a telephone number and a case manufacturing facilities and factory-managed dormitories and dining
number that identies the facility and
areas, as well as a review of records and relevant policies and procedures.
audit date. This mechanism enables
workers to provide additional infor-
mation after an audit and to report Auditors
any adverse consequences of their
participation in the audit.

Interviews Interviews with Physical inspection Review

with workers senior management of facilities of records

Management system examinations

There may be cases where our audit reveals compliance in actual practice,
but the underlying management system may not be strong enough to prevent
violations. For this reason, Apple audits include examination of the manage-
ment systems—such as policies and procedures, roles and responsibilities, and
training programs—underlying every category in our Code.

Corrective action process

Apple reviews all audit ndings with the facility’s senior management team.
When a violation is found, we require the facility to implement a corrective
action plan that addresses the specic violation, as well as the underlying
management system. We expect that all corrective and preventive action
plans will be closed within 90 days after the audit.

Conduct audit

Apple audits include physical inspection of

factory-managed dining facilities. Verify completion of Review
corrective actions violations

Implement Develop corrective

corrective actions action plan

Apple’s goal is to drive each facility toward compliance with our Code,
as this provides the best path to positive change over the long term. We
perform a verication audit to conrm that actions have been executed,
and we collaborate with the supplier until issues are fully addressed.
However, if a facility’s actions do not meet our demands, Apple may
have no choice but to terminate the business relationship.
 Supplier Responsibility 15
2011 Progress Report

Overview of 2010 Audit Results

Working-hour challenges
We consistently see violations of our limits
on working hours. Apple is addressing this
industrywide problem by investigating
root causes, training supplier manage-
ment, and requiring implementation of
preventive action plans.
Apple conducted audits at 127 facilities, including 30 repeat audits and
97 rst-time audits. Our repeat audits showed continued performance
improvements and better working conditions. First-time audits revealed
patterns of compliance and noncompliance similar to rst-time audits in
previous years. For details concerning violations in subcategories where
audits revealed noncompliance across many facilities, see the appendix
on pages 23 to 25.

Practices Management
Category Subcategory in Compliance Systems in Place
Labor and Human Rights 72% 65%
Antidiscrimination 69% 53%
Fair treatment 91% 75%
Prevention of involuntary labor 76% 72%
Prevention of underage labor 96% 83%
Juvenile worker protections 73% 62%
Working hours 32% 30%
Wages and benets 70% 65%
Freedom of association 99% 79%

Health and Safety 72% 73%

Occupational injury prevention 57% 57%
Prevention of chemical exposure 85% 87%
Emergency prevention, preparedness, and response 66% 70%
Occupational safety procedures and systems 77% 74%
Ergonomics 64% 47%
Dormitory and dining 75% 77%
Health and safety communication 73% 80%

Environmental Impact 80% 82%

Hazardous substance management 68% 76%
Wastewater management 89% 89%
Air emissions management 69% 74%
Solid waste management 95% 93%
Environmental permits and reporting 70% 73%
Pollution production and resource allocation 97% 95%

Ethics 95% 82%

Business integrity 96% 85%
Disclosure of information 96% 87%
Whistleblower protection and anonymous complaints 92% 73%
Protection of intellectual property 98% 88%

Management Commitment 64% 64%

Company statement 57% 57%
Management accountability and responsibility 52% 52%
Documentation and records 75% 75%
Training and communication 73% 73%
Worker feedback and participation 86% 86%
Corrective action process 57% 57%

Category and subcategory percentages represent the average across all facilities of the line items scored under that
category or subcategory. Category percentages are not averages of the subcategory percentages.
 Supplier Responsibility 16
2011 Progress Report

2010 Core Violations

A core violation is the most serious class of violation. It refers to any practice
or situation that we consider to be contrary to the core principles underlying
Apple’s Supplier Code of Conduct. Core violations include instances of abuse,
underage labor, involuntary labor, falsication of audited materials, worker
endangerment, intimidation or retaliation against workers participating in
an audit, and signicant threats to the environment.
Whenever a core violation is detected, we require that the facility immediately
remedy the situation to ensure the health, safety, and human rights of its
workers. We follow with a thorough examination of their management
systems and require improvements that prevent future violations. To help
with implementation of corrective and preventive actions, we may require the
facility to work with a specialized consultant. In addition, the facility is placed
on probation, usually for a period of one year, ending with a reaudit to verify
that the core violation had not reoccurred.
In 2010, our audits of 127 facilities revealed 37 core violations: 18 facilities
where workers had paid excessive recruitment fees, which we consider to
be involuntary labor; ten facilities where underage workers had been hired;
two instances of worker endangerment; four facilities where records were
falsied; one case of bribery; and one case of coaching workers on how to
answer auditors’ questions.
When core violations occur, Apple’s goal is to work with suppliers to address
problems, verify corrective actions, and drive improvements. We expect suppliers
to take these situations as seriously as we do. Our 2010 audits and corrective
action processes revealed three facilities where management failed to
demonstrate serious commitment. In all three cases, we terminated business.

Involuntary labor
For more information, see pages 7 and 8.

Finding Apple response

18 facilities We discovered foreign contract workers who had paid We required suppliers to reimburse any fees that exceeded
excessive recruitment fees to labor agencies. Apple’s limits. A total of $3.4 million has been repaid to
workers since 2008.

Underage labor
For more information, see pages 9 and 10.

Finding Apple response

9 facilities We discovered a total of 49 underage workers across the We required the suppliers to support the young workers’
9 facilities. return to school and to improve their management
systems—such as labor recruitment practices and
age-verification procedures—to prevent recurrences.

1 facility We discovered a total of 42 underage workers.
We determined management had chosen to overlook the
issue and was not committed to addressing the problem.
We required the supplier to support the young workers’
return to school and to improve their management systems
to prevent recurrences.
Apple has terminated business with the facility.
 Supplier Responsibility 17
2011 Progress Report

Worker endangerment
Finding Apple response

1 facility Workers suffered adverse health effects following exposure We required the facility to discontinue use of n-hexane, to fix
to n-hexane in poorly ventilated areas. the factory’s ventilation systems, and to implement improve-
ments to their management systems for Environmental Health
and Safety. For more information, see page 20.

1 facility Workers performed activities at heights greater than
3 meters without guardrails or safety harnesses.
We required the facility to establish clear procedures and
provide training for elevated work; to ensure elevated work
areas have appropriate guardrails; to provide workers with
safety harnesses, where required; and to review operations
regularly to ensure workers are following safety procedures.

Falsification of audit materials

Finding Apple response

2 facilities Presented falsified payroll records and provided misleading
interview answers to Apple’s audit team.
We required an independent audit to review payroll records
and to look for additional falsification. Investigation at one
facility revealed no actual violations. Investigation at the other
facility indicated underpayment of basic wages, underpayment
of overtime premium, and illegal benefit practices. We required
the facility to pay workers the appropriate amount and to
adjust benefits according to Apple’s Code and local law.

1 facility Presented falsified payroll records and provided misleading Apple has terminated business with the facility.
interview answers to Apple’s audit team.
Repeat core violation for falsification.

1 facility Concealed a production area from Apple’s audit team,
preventing assessment of associated environmental health
and safety risks.
We conducted a complete inspection of the concealed
production area, which revealed poor health and safety
working conditions. We required them to fix all violations in
this area and to certify that all facilities used to manufacture
Apple products had been disclosed.

Bribery
Finding Apple response

1 facility A facility manager offered cash to Apple’s third-party auditors, Apple has terminated business with the facility.
asking them to reduce the number of audit findings.
Repeat core violation for ethics.

Coaching
Finding Apple response

1 facility A facility manager assembled workers and told them to We required the facility to provide accurate payroll records.
provide false wage payment information to Apple auditors. We also required them to train all facility management on the
prohibitions against providing false information in an audit.
We will return for a full reaudit in 2011.
 Supplier Responsibility 18
2011 Progress Report

Responding to Suicides
at Foxconn

Like many of our customers and others around the world, we were disturbed
and deeply saddened to learn that factory workers were taking their own
lives at the Shenzhen facility of Foxconn.
Recognizing that we would need additional expertise to help prevent further
tragedies, we launched an international search for the most knowledgeable
suicide prevention specialists—particularly those with experience in China—
and asked them to advise Apple and Foxconn.
Two leading experts accompanied Apple COO Tim Cook and other Apple
executives on a visit to the Shenzhen factory in June 2010. This group met
with Foxconn CEO Terry Gou and members of his senior sta! to better
understand the conditions at the site and to assess the emergency measures
Foxconn was putting in place to prevent more suicides.
Apple then commissioned an independent review by a broader team of suicide
prevention experts. This team was asked to conduct a deeper investigation
into the suicides, evaluate Foxconn’s response, and recommend strategies for
supporting workers’ mental health in the future.
During July 2010, the independent team:
• Surveyed more than 1000 workers about their quality of life, sources of stress,
psychological health, and other work-related factors. The team designed the
questionnaire, delivered and collected it, and tabulated the results without
Foxconn’s involvement.
• Interviewed workers face to face, met separately with their managers, and
evaluated working and living conditions rsthand.
• Reviewed the facts of each suicide and the known circumstances behind them.
• Evaluated Foxconn’s management of the crisis, assessing the e!ectiveness
of counseling services and emergency response systems.
 Supplier Responsibility 19
2011 Progress Report

In August 2010, the independent team presented its ndings and recommen-
dations to Terry Gou and senior executives from Foxconn and Apple. The team
commended Foxconn for taking quick action on several fronts simultaneously,
including hiring a large number of psychological counselors, establishing a
24-hour care center, and even attaching large nets to the factory buildings to
prevent impulsive suicides. The independent team also found that Foxconn
had worked openly with many outside experts and government o"cials in
reacting to the crisis. Most important, the investigation found that Foxconn’s
response had denitely saved lives.
The independent team suggested several areas for improvement, such
as better training of hotline sta! and care center counselors and better
monitoring to ensure e!ectiveness. Foxconn incorporated the team’s specic
recommendations into their long-term plans for addressing employee well-
being. The company is implementing an employee assistance program (EAP)
that focuses on maintaining employee mental health and expanding social
support networks. In addition, they have begun the process of expanding
operations to other parts of China, enabling workers to be closer to their
home provinces.
Apple will continue to work with Foxconn through the implementation of
these programs, and we plan to take key learnings from this engagement to
other facilities in our supply base.

Investigating reports of violations
Apple investigates reports of alleged
violations in our supply base, ranging
from public reports by NGOs to infor-
mation submitted directly by factory
workers. Once we verify that the report
pertains to an Apple supplier facility, we
discuss the alleged violation with the
supplier, review the facility’s past audits
and corrective actions, and conduct an
unannounced audit, if appropriate.
Supplier Responsibility 20
2011 Progress Report
Addressing the Use
of N-Hexane
For all chemicals in the workplace, Apple’s Code requires adequate
ventilation systems, proper handling and disposal, and robust processes
for risk assessments, training, and emergency response.
In 2010, we learned that 137 workers at the Suzhou facility of Wintek, one
of Apple’s suppliers, had su!ered adverse health e!ects following exposure
to n-hexane, a chemical in cleaning agents used in some manufacturing
processes. We discovered that the factory had recongured operations
without also changing their ventilation system. Apple considered this series
of incidents to be a core violation for worker endangerment.
We required Wintek to stop using n-hexane and to provide evidence that
they had removed the chemical from their production lines. In addition,
Apple required them to x their ventilation system. Since these changes,
no new workers have su!ered di"culties from chemical exposure.
To prevent future incidents at this facility, we required Wintek to work with
a consultant to improve their Environmental Health and Safety processes
and management systems. We are monitoring the implementation of these
corrective actions and preventive measures, and will conduct a complete
reaudit of the facility in 2011.
In parallel, Apple has veried that all a!ected workers have been treated
successfully, and we continue to monitor their medical reports until full
recuperation. Following China law, Wintek has paid medical treatment, meals,
and foregone wages for sick or recuperating workers. A majority of the
137 workers have returned to employment at the same factory.
We are aware of another reported incident involving n-hexane. Apple
learned that a logo supplier and its subcontractor were using the chemical.
When we investigated, we found that the subcontractor had been shut
down by local o"cials. We audited the logo supplier and veried that
n-hexane was no longer in use. However, we found poor management
systems for Environmental Health and Safety, and we are working with the
facility to expedite corrections. We are also following up on the health of
workers who were exposed to n-hexane at this facility.
 Supplier Responsibility 21
2011 Progress Report

Holding Suppliers
Accountable

Apple incorporates social responsibility For an ongoing view of social responsibility performance, Apple requires our
performance indicators in business nal assembly manufacturers to provide quarterly reports of Key Performance
review scorecards with all nal assembly Indicators (KPIs) for social responsibility, including statistics related to employee
manufacturers and suppliers of compo- overtime, training, injuries, living conditions, complaints, and turnover. KPIs
nents such as the following:
allow us to evaluate how a facility’s performance has changed over previous
• Batteries quarters, and we can compare their results with those of similar facilities.
• Board electrical components
Business reviews with suppliers cover commitment to Apple’s Code, past
• Cables and connectors
• Displays and current audit performance, closure of corrective action plans, leadership
• Fans activities, and KPIs for social responsibility. Any open issues are discussed
• Heat sinks and resolved between Apple and the supplier’s executive management.
• Hard drives Apple’s procurement decisions take into account a facility’s social responsibility
• Memory
performance, along with factors such as quality, cost, and timely delivery.
• Microphones
When social responsibility performance consistently fails to meet our
• Peripheral devices
expectations, we terminate business.
• Power systems
• Printed circuit boards By addressing what’s important to Apple and by holding suppliers accountable,
• Speakers we motivate our suppliers to improve their practices. In this way, Apple continues
• Trackpads to increase awareness of social responsibility and to drive improvements in
• Touchscreens working conditions more broadly across our supply base.
 Supplier Responsibility 22
2011 Progress Report

Moving Forward

Apple continues to improve our supplier responsibility program to ensure

that working conditions in our supply base are safe, workers are treated
with respect and dignity, and manufacturing processes are environmentally
responsible.
Our priorities for 2011 are to:
• Extend the reach and improve the quality of Apple-mandated social
responsibility training so that more workers understand their rights and
how to communicate with factory management.
• Equip additional suppliers with Apple SEED classrooms to help workers
continue their education while remaining employed.
• Collaborate with industry groups and NGOs in China to address key issues—
such as working hours, underage labor, and employee well-being—through
root cause analysis, more aggressive audits, stronger requirements for correc-
tive and preventive actions, and expanded supplier training and assistance.
• Drive conict-free verication measures to smelters in our supply chain,
and require our component suppliers to source tantalum and tin from
conict-free producers.
To provide feedback on this report, comment on Apple’s supplier responsibility
program, or report a possible violation in Apple’s supply base, please send an
email to supplierresponsibility@apple.com.
 Supplier Responsibility 23
2011 Progress Report

Appendix
Frequent ndings in subcategories where audits
revealed noncompliance across many facilities

Antidiscrimination
Apple’s Code protects against discrimination on the basis of race, color, age, gender, sexual orientation, ethnicity, disability, religion, political
affiliation, union membership, national origin, and marital status, and prohibits pregnancy tests or medical tests from discriminatory use.

Findings Corrective actions

41 facilities screened job candidates or current workers for hepatitis B, We classified these practices as discrimination—even where permissible
and 54 other facilities lacked policies and procedures that prohibit under local laws—and required facilities to discontinue the practice and
discrimination based on results of medical tests. to establish clear policies and procedures to prevent reoccurrence.
30 facilities conducted pregnancy tests, and 57 other facilities did not
have policies and procedures that prohibit discriminatory practices
based on pregnancy.

Working hours
Apple’s Code sets a maximum of 60 work hours per week and requires at least one day of rest per seven days of work, while allowing
exceptions in unusual or emergency circumstances.

Findings Corrective actions

76 facilities had records that indicated workers had exceeded weekly We required facilities to develop management systems or improve
working-hour limits more than 50 percent of the time. At 74 facilities, existing systems to drive compliance with Apple’s limits on work hours
more than half of the records we reviewed indicated that workers had and required days of rest.
worked more than six consecutive days at least once per month.

Occupational injury prevention

Apple’s Code requires suppliers to provide a safe work environment, to eliminate physical hazards wherever possible, and to establish
administrative controls that reduce risks.

Findings Corrective actions

64 facilities had violations in engineering controls. For example, we We required facilities to equip all dangerous machines with adequate
found machines that were missing safety devices, such as gear guards safety devices and to conduct regular maintenance to prevent injuries.
or pulley guards.

95 facilities had violations in administrative controls. For example, We required facilities to establish a schedule for performing required
facilities did not conduct regular safety inspections, and workers who inspections and to ensure workers have appropriate training, licenses,
performed specialized tasks did not have legally required licenses or and certifications as required by law.
certifications.

54 facilities had workers who were not wearing appropriate personal
protective equipment (PPE), such as earplugs, safety glasses, and dust
masks. In some instances, the facility had not provided the appropriate
safety equipment. In others, the workers neglected to use the
equipment or were using it improperly.
We required facilities to provide the necessary PPE, to educate both
workers and supervisors on the risks of not wearing the equipment,
and to hold supervisors accountable for ensuring that workers use
the equipment properly.
 Supplier Responsibility 24
2011 Progress Report

Emergency prevention, preparedness, and response

Apple’s Code requires facilities to anticipate, identify, and assess emergency situations and to minimize their impact by implementing
emergency plans and response procedures.

Findings Corrective actions

47 facilities did not have appropriate first-aid supplies for emergency We required facilities to provide properly supplied first-aid stations in
situations. For example, there were no eyewash stations in areas where all production areas.
chemicals were used or stored.

78 facilities did not have properly maintained fire detection and We required facilities to provide appropriate fire equipment, to ensure
suppression equipment. For example, access to some fire hydrants it remains in good condition, and to provide easy access in emergency
or fire extinguishers was blocked, and some fire extinguishers were situations.
placed on the ground.

81 facilities did not have adequate exit paths for emergency We required facilities to make improvements to their exits and to
situations. For example, we found narrow evacuation aisles or locked check them regularly to ensure fast and easy evacuation in the event
emergency exits. of an emergency.

Ergonomics
Apple’s Code requires facilities to assess which of its operations pose ergonomic risks to workers—even where not required by law—and to
implement risk reduction measures, such as redesigning workstations to facilitate better posture, providing magnifying glasses for close-up work,
and rotating workers among tasks to reduce repetitive motion.

Findings Corrective actions

36 facilities had not conducted ergonomic risk assessments. We required facilities to have a qualified professional determine which
manufacturing operations pose risks of repetitive motion and other
ergonomic injuries and to take steps to reduce the associated risks.

Hazardous substance management

Apple’s Code requires facilities to comply with the most recent version of Apple’s Regulated Substances Specification and with any applicable
laws and regulations prohibiting or restricting the use or handling of specific substances. Facilities must identify and manage substances that
pose a hazard if released to the environment and comply with applicable labeling laws and regulations for safe handling, transport, recycling,
reuse, and disposal.

Findings Corrective actions

80 facilities were not storing or handling hazardous chemicals properly. We required facilities to establish chemical management procedures
For example, some facilities did not provide secondary containment for for proper handling and storage of hazardous substances.
hazardous chemicals or separate storage for incompatible chemicals.

41 facilities were not recycling or disposing of hazardous wastes We required facilities to correct their hazardous waste disposal
properly and as required by law. practices and to maintain documentation to demonstrate compliance
with Apple requirements and applicable laws.

Air emissions management

Apple’s Code requires facilities to characterize, monitor, control, and treat air emissions of volatile organic chemicals, aerosols, corrosives,
particulates, ozone-depleting chemicals, and combustion by-products generated from operations—as required by applicable laws and
regulations—before discharge.

Findings Corrective actions

37 facilities failed to monitor and control air emissions. For example, We required facilities to treat air emissions, to conduct regular
facilities did not inspect discharges regularly to ensure compliance inspections to ensure compliance with the law, and to mark clearly
with the law, or the air emission outlets were not marked clearly. all air emission outlets.
 Supplier Responsibility 25
2011 Progress Report

Environmental permits and reporting

Apple’s Code requires facilities to hold up-to-date permits for air emissions, wastewater discharge, hazardous waste disposal, X-ray equipment, and
boundary noise. Facilities must comply with applicable laws requiring an analysis of the environmental impact of their facilities and operations.

Findings Corrective actions

63 facilities had not completed or had not received official approval
for an environmental impact assessment. Some of these facilities
were missing assessments in one or more areas of the Environmental
Impact section of our Code, did not update their assessments after a
process or equipment change, or did not have permits for X-ray
radiation equipment.
We required facilities to conduct an environmental impact assessment
of their entire facility and file it with the government for approval.
We also required them to establish a process for regular validation
of impact assessments and approvals, and to obtain permits and to
communicate procedures for adhering to the conditions of the permits.

Management commitment
Apple’s Code requires facility management to demonstrate commitment to our Code, including assigning a dedicated resource accountable for
compliance; implementing procedures for corrective actions when deficiencies are identified; and establishing training programs for workers
and management.

Findings Corrective actions

54 facilities did not have a company statement on social and We required facilities to establish a comprehensive statement on social
environmental responsibility that covered all categories of Apple’s Code. and environmental responsibility and to appoint qualified personnel to
For example, some facilities had a statement for Health and Safety or ensure specified measures are implemented in management systems
Environment, but not for Labor and Human Rights or for Ethics. and daily business operations.

53 facilities did not have dedicated personnel accountable for
compliance with all categories of Apple’s Code, including implementing
corrective actions when Apple identifies violations to our Code.
We required facilities to appoint qualified personnel, ensuring that
responsibility and accountability for compliance are included in their
job descriptions. These job descriptions include ownership of a process
for correcting deficiencies identified by internal and external audits,
written corrective action procedures, and verification of the completion
of appropriate actions.

For More Information
For more information about Apple’s
Supplier Responsibility Program, visit
www.apple.com/supplierresponsibility.
Note: In 2010, Apple updated our audit protocols to align with changes in the Supplier Code of Conduct. Historical audit scores
referenced in this report have been recalculated for comparability with 2010 audit results.
© 2011 Apple Inc. All rights reserved. Apple, the Apple logo, iPad, iPhone, iPod, Mac, and Time Capsule are trademarks of Apple
Inc., registered in the U.S. and other countries. Other product and company names mentioned herein may be trademarks of their
respective companies. February 2011 L423456A